At Heritage, we believe that education is an important part of the estate planning process. On this blog we will be sharing some information, articles, and opinions that you may find helpful along your way.

Pet Trust

09/02/2015

If you are a pet owner, chances are you love your pets and consider them family members. We love them, we buy them toys, and it is not usual for people to bury their beloved pets in pet cemeteries. However, we often do not make plans for what will happen to our pets if we should die before them. Ask at any animal shelter – many of the animals arrive at the shelters when children or relatives do not want to or cannot care for the pets of deceased family members. In 1990, changes to the Uniform Probate Code recognized the creation of Pet Trusts, and states began to enact pet trust laws that govern in the event of an owner’s death or disability.

The state of Florida enacted laws to authorize the establishment of pet trusts in 2003, allowing petowners to plan for the care and maintenance for their pet’s lifetime. An article in The Naples Daily News, “Pet Trusts Gaining Popularity.” explains the fundamental issues involved.

Now almost every state recognizes these trusts (which vary in each state). A named trustee will typically be responsible for the investment, management and distribution of the trust assets. Another individual is named to avoid conflict of interest as the pet’s caregiver. The trust will include details for caregivers, medical needs, and the final arrangements for the pet’s death.

However, Internal Revenue Code typically doesn’t recognize pet trusts, as an animal isn’t a “person” by definition. The trust wouldn’t work because it doesn’t have a legal "beneficiary.” Nonetheless, the IRS does recognize pet trusts for tax purposes.

If the trust is validly established under state law, the assets passed to a pet trust are included in the decedent’s gross taxable estate. But no part of the assets qualifies for a charitable deduction—even if the remainder beneficiary after the passing of the pet is a qualifying charity.

You should speak with a qualified estate planning attorney because estate taxes and other expenses attributable to the trust will need to be considered when drafting a pet trust. Planning for your pets can be an important part of your estate planning process. Make sure that all members of your family—including your pets—are cared for in your estate plan. For more information on pet trusts, contact us today.

09/25/2014

Rivers' goddaughter Tracie Hotchner told the Daily Mail, "She loved her dogs dearly, and they meant so much to her ... dogs have become accepted as such essential family members that providing for them well in life, and after death, is considered quite normal."

Have you made proper plans for the pets in your life in the event of your passing? Don't forget! Take a lesson from the late Joan Rivers.

The Joan Rivers estate is estimated to be worth approximately $150 million. The public does not know for certain how much the estate is worth as Rivers used a trust which keeps the details of her estate plan private. It is known that most of the estate will go to her daughter, Melissa Rivers, and her grandson, Cooper. In fact, Joan Rivers said this would be the case while she was still alive.

In an article titled "What Joan Rivers Just Taught Pet Lovers About Estate Planning,"Daily Finance reveals an aspect of the Rivers estate that is less well known. Joan Rivers had four dogs she loved and regarded as part of her family. She made provisions in her estate plan for the care of her dogs even though their owner has passed away.

You do not have to be rich or famous to provide for your pets after you pass away. Pet trusts are a relatively simple way of setting aside money for your pets and for providing a suitable care taker for them. They do not require massive wealth to set up and are valid in every state. If you want to make certain your pets will be okay after you pass away, then seek the counsel of an experienced estate planning attorney to learn more.